The Ilott case: contested wills, charities and the law

17 Mar 2017 Nick Garbutt    Last updated: 17 Mar 2017

There were two landmark legal cases of great interest to the sector this week.  Here Nick Garbutt examines the case of a woman who left all her money to charity, disinheriting her daughter. 

Legacies are of enormous importance to many UK charities. Latest estimates are that more than £2 billion per annum is received in this way, that’s 15% of all voluntary income.

But what should happen when a widow leaves everything in her will to charities and cuts out her daughter, leaving her to live on benefits?

Should the will be overturned? And if so how much should the daughter get?

This was the central issue in the case of Ilott v The Blue Cross and others which has finally reached the Supreme Court after a 13-year legal battle. It is of great importance to all those charities who depend on legacies for their work.

It raises fascinating moral and legal issues over overturning the last will and testament of someone who has died, and the rights and obligations of family members to each other. It also happens to concern vital revenue streams for charities dependent on legacies to do important work.

The facts, very briefly, are as follows.

Heather Ilott ran away from home when she was 17 because her mother Melita Jackson did not approve of her boyfriend. She subsequently married Nicholas Ilott and was estranged from her mother until Mrs Jackson’s death in 2004.  By this time she had been cut out of her mother’s will. Mrs Jackson gave her entire estate - £486,000 - to a series of animal charities. She had no previous affiliation with any of them but left instructions that any attempt to overturn the will should be fought.

Mrs Ilott did contest the will. She and her husband were struggling on benefits and had never been able to take a holiday, household equipment was old and worn out and they could not afford music or sports lessons for their four children. She argued that she was entitled to some of the money.

After a series of court battles the Court of Appeal awarded her £160,000 in order to enable her to buy the Housing Association home that she rented. The charities who would consequently miss out appealed to the Supreme Court. They were careful to stress that they did this to uphold the principle that we should all retain the right to dispose of our possessions as we see fit when we die.

UK law is anomalous in that it allows people complete freedom to leave their possessions to whoever they wish. Other legal systems curtail this to ensure that family members have fixed rights to the estate, limiting the scope to donate to good causes.  

From time to time this has proved controversial. The issue of whether it was fair for people to have complete freedom in disposing of their assets on death was considered by the Law Commission in 1971. It concluded: “The principle of absolute freedom of testation is acceptable only if the view were taken that it is more important to be able to dispose of property than to meet natural and legal obligations to the family. We do not believe this view to have any degree of support.”

But the idea of granting UK families fixed rights to inheritance was subsequently rejected. Instead the Act that followed in 1975 stipulates that reasonable financial provision should be provided for the relatives. This does not mean that all are entitled to benefit. It is supposed to protect relatives left in hardship who can apply to the courts to get some of the legacy. However, that is strictly limited to “what is reasonable for the claimant’s maintenance”.

The Supreme Court judgement in the Ilott case was in favour of the charities. Mrs Ilott will not therefore receive £160,000 instead she will get £50,000, a sum awarded by a lower court.

In so far as the judgment protects legacy donations to charities this will be seen as good news by many.  

However, although the Ilott case is now be settled, there may still be ramifications.

 In her judgment Lady Hale said: “This case raises some profound questions about the nature of family obligations, the relationship between family obligations and the state, and the relationship between the freedom of property owners to dispose of their property as they see fit and their duty to fulfil their family obligations. All are raised by the facts of this case but none is answered by the legislation which we have to apply or by the work of the Law Commission which led to it.”

She said that the present law is unsatisfactory because it does not give any guidance as to what factors should be taken into account in deciding whether or not a child is deserving of reasonable maintenance.

This is quite strong language for a judge and it is likely to provoke much further and wider debate.

She also raised a troubling question: the issue of whether or not it was reasonable for someone to make out a will in such a way as to make relatives dependent on the state. In this case because Mrs Ilott is dependent on benefits she is dependent on the public purse for her survival whilst her mother has left funds to charity.

It will therefore be used for good causes, but at a cost to the state.

For the present, public opinion appears to be behind the UK principle of testatory freedom. The Law Commission last considered the question in 2008. It found that there was support for the approach but also considered surveys which suggested that public opinion also backs the right to challenge wills on the basis of need. Because there is no legal guidance on what that means, and because people (including presumably judges) have such widely different views on what that is or should be, it is hard to see how further disputes will be avoided without amendments to the current law.

 

 

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